Energy plan may still face state hurdles

The Turnbull government faces a list of demands in order to win over Labor states for a national energy plan but one is already being written off as non-negotiable.

Victoria, Queensland and the ACT governments have each detailed the conditions they want met in the National Energy Guarantee before giving more than in-principle support for consultation.

Ministers did compromise in Sydney on Friday in an agreement to release draft state legislation for month-long consultation subject to coalition party room support in Canberra on Tuesday

Securing that support is one demand met but federal Energy Minister Josh Frydenberg is staring down the barrel of a handful more and while some he's willing to discuss, other's he's not budging on.

Victorian Energy Minister Lily D'Ambrosio could get her way on calls for the emissions reduction target to be reviewed three-yearly but not on calls for targets to be set by regulation.

"We are not negotiating on the regulation versus legislation. Victoria knows that," Mr Frydenberg said pointing out Victoria has legislated its own targets.

Queensland and the ACT are also calling for the "inadequate" emissions target to be addressed.

The current policy sets the target at 26 per cent until 2030, with a review in 2024 and five yearly reviews from 2030.

There was unanimous support among ministers for continued work on the policy and for a further teleconference after Tuesday's party room meeting before a decision on releasing the draft legislation.

The draft legislation would implement changes to the National Electricity Law and must be passed by the South Australian parliament for the guarantee's reliability requirements to come into effect.

It, and federal legislation to set the target for emissions reduction in the electricity sector, must undergo four weeks' public consultation before parliament can consider it.

SA Energy Minister Dan van Holst Pellekaan said if legislation made it to state parliament by October it should pass this year.

He and other Liberal ministers, from NSW and Tasmania, are hopeful the policy will get up.

"We are all respectfully working through all states' points of view - some are ready to go, some are a bit more cautious, no-one has said that they will not get to the end point that we need to be at," he said.

Federal Labor spokesman Mark Butler welcomed the progress but would not yet say if Labor would back the policy through parliament, still wanting a 45 per cent emissions reduction target.

"Let's not get ahead of ourselves, we haven't even seen draft legislation," he said.

As well as reducing emissions the policy aims to ensure reliable supply by requiring retailers invest in dispatchable energy sources, in turn driving down prices with greater supply.

The Climate Council said the lack of decision is a sign states and territories believe the emissions target is critical and the current plan doesn't stack up.

Smart Energy Council boss John Grimes welcomed the "red line" conditions and said more work was needed.